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Old 12-30-2010, 09:52 AM   #21
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In your lifetime? I just don't see that happening. Two generations hence, maybe even in my kids' lifetimes, but I don't see $20 a gallon gasoline in anything close to the near future.


Why not? Gas was $1.03/gallon 12 years ago.

Vehicle Technologies Program: Fact #364: March 21, 2005 Historical Gas Prices, 1919–2004

So we have had a 3x-4x increase in just 12 years. I fully expect a 5x-6x increase over the next 30 years (about 5-6% growth). Unless some affordable alternate energy form takes off before then, but we didn't get that in the past 30 years either.

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Old 12-30-2010, 04:38 PM   #22
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In your lifetime? I just don't see that happening. Two generations hence, maybe even in my kids' lifetimes, but I don't see $20 a gallon gasoline in anything close to the near future.
Not a certainty but a real enough possibility that I'm not going to buy something that I think there is a real chance I can't afford to fuel later on. Bear in mind that I fully intend to keep my 8-year-old truck for at least the next ten years barring theft or accident.

Even at $8/gallon I'd choke at a $200 fill-up. At that price a Honda Rebel (250cc motorcycle) starts to look very attractive.

I'd keep the truck, but it wouldn't be driven unless I truly needed the truck's capabilities.
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Old 12-30-2010, 04:49 PM   #23
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My bicycle is my hedge against higher gas prices.
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Old 12-31-2010, 06:44 AM   #24
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My bicycle is my hedge against higher gas prices.
My sailboat is mine , wind power, and the solar panels provide electric...plus when we go 3rd world, I can move to a better country...
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Old 12-31-2010, 10:07 AM   #25
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Sounds like I need to buy a little USO again to pop this thing.

Seriously, though, the speculators are going to wreck any recovery by dampening it with much higher oil prices. The correlation between oil prices, economic indicators and the stock market has never been higher in my recollection.
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Old 12-31-2010, 10:11 AM   #26
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Sounds like I need to buy a little USO again to pop this thing.
Now looks like an excellent time for you to buy...

If it is any consolation, I had some feathers singed by following the herd on USO as well. I've been more fortunate with my purchase of USL, making up for my USO losses and then some.
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Old 12-31-2010, 11:44 AM   #27
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It surely looks like quite a few do dabble in market timing or sector play without openly admitting to it. The truth will out. Heh heh heh...

PS. Uncle Mick has been absent for a while. If he does not log in anymore, I will take over his signature.
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Old 12-31-2010, 12:28 PM   #28
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It surely looks like quite a few do dabble in market timing or sector play without openly admitting to it. The truth will out. Heh heh heh....
I don't want to waste your time or mine by getting into another pissing match about the difference between "market timing" and "rebalancing".
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Old 12-31-2010, 12:36 PM   #29
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Sounds like I need to buy a little USO again to pop this thing.

Seriously, though, the speculators are going to wreck any recovery by dampening it with much higher oil prices. The correlation between oil prices, economic indicators and the stock market has never been higher in my recollection.
I agree. I do however buy the UCO which acts twice as volatile as USO. So I was able to take a little off the table at $12.50 a couple of weeks ago. Plan on picking more up again back in the low 10 range.
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Old 12-31-2010, 12:45 PM   #30
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I don't want to waste your time or mine by getting into another pissing match about the difference between "market timing" and "rebalancing".
It's too bad my joking/taunting was taken as a pissing match.

But that's OK. Maybe I push it too far. So, let me change my earlier post.

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It surely looks like quite a few do dabble in market timing or sector play without openly admitting to it. The truth will out. Heh heh heh...
Is there any write up on how rebalancing involves buying specialized ETFs?

Anyway, it does not really matter to me what it is called. If one sees something that he perceives as a good deal, what is wrong if he wants to buy more of it? Yes, even if he turned out to be wrong sometimes.

Why are people afraid of being "accused" of making judgements on the value of something? I am still trying to figure this out.
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Old 12-31-2010, 12:50 PM   #31
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It surely looks like quite a few do dabble in market timing or sector play without openly admitting to it. The truth will out. Heh heh heh...
Excuse me.... I think you are confusing market timing with a Tactical Allocation.
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Old 12-31-2010, 12:53 PM   #32
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It's too bad my joking/taunting was taken as a pissing match.
Perhaps a definition of taunting would help with your understanding:
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taunt

- to reproach in a sarcastic, insulting, or jeering manner; mock.
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Old 12-31-2010, 01:04 PM   #33
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I appreciate your pointing out the derogatory meaning of the word. I usually took it in the more lighthearted manner, and I was wrong. I should not use that word.

But, but, but, back to my other question, are we allowed to spot a bargain and load up on it? Or must we tell ourselves all the time that it is just a mirage?
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Old 12-31-2010, 01:59 PM   #34
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REWahoo, maybe I ticked you off because I appeared to pick on you. It is just because we have exchanged a few posts over the years, and I always thought it was on friendly terms. I really was just teasing and did not expect you to get offended. You may not remember, but I first learned of the term "DMT" from an exchange of posts with you.

The heart of the matter is that I do not understand why people are so afraid of making some judgement calls. Now, most of the time, I am not sure I know what the hell I am doing, hence it is better to follow the crowd. But I try to spot bargains all the time, and have had a few successes along with failures. Of course I am always too chicken to load it up on the successful trades, else would be filthy rich.

I fully understand where Bogle and Malkiel are coming from. I have not actually read any of Bogle's books, but I enjoyed Malkiel's "Random Walk". As I have told this story many times, I had friends who loaded up on gold in the late 80s and got burned bad. So, just like most of us, I do not veer too far off the well-beaten path. One feels more secure in the middle of the crowd.

But as it turns out, we all have a bit of risk taking in us, and we do all make some small bets outside of the index. What I do not understand is why people are so ashamed of it? Why is it that the practical way of investing of Bogle becomes a dogma?

And by the way, because I do not "get out" much on the Web. I did not know of the Boglehead forum until I read about it on this forum. However, I do not go there, because it seems to me there are too many hardcore Boglehead types there, who act like religious fanatics. Fanatics of any kind turn me off.
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Old 12-31-2010, 02:16 PM   #35
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But, but, but, back to my other question, are we allowed to spot a bargain and load up on it? Or must we tell ourselves all the time that it is just a mirage?
Let's all play nice here, kids. Man, its not even 5 o clock yet and people are getting touchy.

Back to your question: Many posters seem to want ideological purity in investing. If you claim to be an asset allocator, they get bent out of shape when you talk about your latest speculations. If you make no claims to worshipping at the altar of strict allocation, you get cut a lot of slack (Haha and I make no claims to allocating and don't get yelled at for it) but also see a lot of your posts hang in space. While the insistence on purity may seem silly, I think there is some merit in it. Its extremely difficult to be unemotional with your investments. Those who have gone to asset allocation often did so to take the emotion out of it, correctly realizing that getting tripped up by emotions happens to a lot of people and can cost you a lot of money. If the allocator starts backsliding around the edges, it can be a very slippery slope and one can quickly find themselves back in the alligator pit of making emotionally-driven decisions that prove disastrous. So many of the allocators are quick to cry foul when one of their own starts slipping.

So I think there is a reasonably sound reason for people to cry foul. Does not mean that it is right for your specific situation, but for the average investor it is probably a useful social mechanism to keep them on the "sunny side."
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Old 12-31-2010, 02:20 PM   #36
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The heart of the matter is that I do not understand why people are so afraid of making some judgement calls.
I can't speak for others who do not attempt to time the market, but I don't see my strategy having anything to do with fear of making some judgment calls. My personal experience is that I'm not intelligent, informed or lucky enough to time the market. I learned that lesson the hard way by getting my @ss handed to me by Mr. Market a couple of decades ago. I view my behavior as educated rather than afraid.

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But as it turns out, we all have a bit of risk taking in us, and we do all make some small bets outside of the index. What I do not understand is why people are so ashamed of it? Why is it that the practical way of investing of Bogle becomes a dogma?
You are painting with a broad brush.

I do not currently hold any index funds nor did I do so while building my portfolio. One does not have to own index funds or worship Bogle to maintain a "buy and and rebalance to maintain a defined asset allocation" strategy.

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Fanatics of any kind turn me off.
I agree. I'm also giving you the benefit of the doubt regarding the implication I am a fanatic.
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Old 12-31-2010, 02:32 PM   #37
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Hey, thanks for the explanation.

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Let's all play nice here, kids. Man, its not even 5 o clock yet and people are getting touchy.
I am still in jesting mood.
Quote:
Back to your question: Many posters seem to want ideological purity in investing. If you claim to be an asset allocator, they get bent out of shape when you talk about your latest speculations.

If you make no claims to worshipping at the altar of strict allocation, you get cut a lot of slack (Haha and I make no claims to allocating and don't get yelled at for it) but also see a lot of your posts hang in space.
Ah! So, it is like a religion after all. Say, some religions do not allow alcohol, and if you drink, you get expelled. But if you never belong, then they do not care. Is it the same way?

Quote:
While the insistence on purity may seem silly, I think there is some merit in it. Its extremely difficult to be unemotional with your investments. Those who have gone to asset allocation often did so to take the emotion out of it, correctly realizing that getting tripped up by emotions happens to a lot of people and can cost you a lot of money. If the allocator starts backsliding around the edges, it can be a very slippery slope and one can quickly find themselves back in the alligator pit of making emotionally-driven decisions that prove disastrous. So many of the allocators are quick to cry foul when one of their own starts slipping.
Fully understood.
Quote:
...for the average investor it is probably a useful social mechanism to keep them on the "sunny side."
Of course! I was too dumb to realize that. I guess my staying out of the Boglehead forum is the right move. By your post, you and Haha would not be welcome there either.
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Old 12-31-2010, 03:14 PM   #38
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$5 a gallon? You guys crack me up. Please point us Europeans at anywhere we can get gas at less than $6.50 a gallon today (that's about the price in Luxembourg or Spain; more like $8.00 in France and Germany). And we drive pretty much the same cars you do nowadays too, unlike a few years back when y'all were getting 15mpg.
I was wondering if any of you guys would chip in.

One thing I noticed when we moved here from England in 1987 was that even though gas was a quarter of the price/gallon that our annual gas bill didn't change much. That was because we had 2 family cars - a Camry and a Corolla, so not gas guzzlers, but I commuted 50 miles round trip
every day instead of 15 miles every 4th day. (The one car we had in England for a family of 4 was a small 1300cc car and I car-pooled with 3 other guys).
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Old 12-31-2010, 03:56 PM   #39
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Market timing - Wikipedia, the free encyclopedia

Market timing
is the strategy of making buy or sell decisions of financial assets (often stocks) by attempting to predict future market price movements. The prediction may be based on an outlook of market or economic conditions resulting from technical or fundamental analysis. This is an investment strategy based on the outlook for an aggregate market, rather than for a particular financial asset.

++++

Asset allocation - Wikipedia, the free encyclopedia

Asset allocation is the process of choosing among possible asset classes.
A large part of financial planning consists of finding an asset allocation that is appropriate for a given investor in terms of their appetite for and ability to shoulder risk. This can depend on various factors; see investor profile. Asset Allocation is the product of an examination of an investor's needs and objectives. Asset allocation, done well, is a plan to invest in assets or asset classes which will best meet the needs and objectives of the investor. Investors seeking high returns and willing to expose their investments to an elevated amount of risk will allocate to equity(ownership) investments. Investors seeking stability and income will allocate to debt investments. Most investors, particularly personal investors, will find mixtures of equity and debt investments most nearly meets their needs. Asset Allocation can be practised by optimization techniques, minimizing risk for a given level of return or maximising return for a given level of risk. It also can be accomplished as goal based investing.
===============


Asset Allocation is simply a subset of Market Timing.
The technique used is the difference between AA and other market timing techniques. The AA market timers are using price (technical analysis) and their AA as the the timing tool.



An AA market timer makes changes when their AA is out of balance from what they established. When one asset is off (e.g. higher) from the established AA the market timer is saying that that asset is at a high and at a good point to take a profit.

I do not think a person who never changed their investments would be a market timer.
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Old 12-31-2010, 04:05 PM   #40
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Let's see...

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How do I stock enough for my RV trip to Alaska? Pulling a tank trailer behind the motor home?
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Fill up the black, gray and fresh water tanks, and add a tank to the roof.
I have not tried to see what I can carry on the roof, but your suggested method would give me a mere total of 155 gal. At 9mpg, that gives me 1500 mi. That does not even get me to Banff! The total round trip is going to be around 8000 mi, not including excursions with the toad. At 9mpg, that's nearly 900 gal, and at $5/gal, it's $4500. Of course gas is more expensive in Canada.

I need to jettison the toad and tow a tank trailer. Let's see here... 900 gal x 6lbs/gal = 5400 lbs, not including the weight of the trailer. More than the motor home can tow. Does not work either!

I already have some energy stocks, but it may not be enough. I better up my stakes to mitigate the higher cost of this "lifetime" trip. And then, to Newfoundland too, and who knows where else. How much money do I need to put in energy stocks for this? Maybe leverage up with some LEAP options?
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